DBS shares jump 2.5%, cross S$50 mark

[SINGAPORE] DBS shares surpassed the S$50 mark in early trade on Friday (Aug 8), a day after it reached that record level following news of its improved Q2 earnings.

The counter hit a high of S$50.98 as at 9.12 am on Friday morning, up S$1.23 or 2.5 per cent, with close to two million shares changing hands. This was after it reached an all-time high level of S$50 on Thursday, before receding to close the day at S$49.75.

It ended Friday at S$50.74, still up by 2 per cent or S$0.99, with 7.7 million shares transacted. This is the first time it closed above S$50.

Year-to-date, it is up by more than 16 per cent from its closing price of S$43.72 on the last trading day of 2024.

Q2 earnings

On Thursday, shares of South-east Asia’s largest bank briefly hit the milestone S$50 mark after the lender beat expectations for its second-quarter earnings.

DBS notched a marginal 1 per cent improvement to its Q2 bottom line, which stood at S$2.82 billion, beating consensus forecasts by Citi and Bloomberg.

This came even amid challenging times ahead for banks. The lender is anticipating falling interest rates to dent its net interest margin (NIM) in the coming quarters.

At the bank’s earnings briefing on Thursday, its chief executive officer Tan Su Shan highlighted that performance risks posed by changes to interest rates and foreign exchange may be mitigated by volume growth.

Even as NIM fluctuates with markets, deposit volume growth can continue to shore up net interest income in 2025, Tan said.

Maybank Research on Thursday upgraded its call on DBS to a “buy” and lifted its target price from S$45.26 to S$56.15 – more than 10 per cent above its highest recorded share price to date.

In a research note, Thilan Wickramasinghe, head of research and regional financials at Maybank Securities Singapore, highlighted that DBS notched above-market trend growth across all pillars for Q2.

Remarking that the bank’s Q2 performance provides “capital returns clarity” in the medium-term, Wickramasinghe said: “We believe DBS’ scale, strong execution, and safe-haven beneficiary status gives it a significant advantage over regional peers.”

As DBS’ NIM fell less than its peers for Q2, Maybank Research is raising its earnings estimates for FY25 to FY27 by 5 to 11 per cent, on more positive operational assumptions.

The research house noted management claims that the bank’s H1 deposits and assets under management growth surpassed peer trends partly as a result of artificial intelligence (AI).

This comes as better predictive models have enabled larger shares of money flows to be captured and as AI aids the tracking and retaining of client investments flow-backs.

“We believe DBS’ tech and AI could continue to create significant competitive advantages,” it said.